High student fees mean 'a degree no longer pays'

Most graduates will not earn enough to cover the cost of their degrees, according to a damning report on the cost of higher education.

The research found that only those who had studied at elite universities such as Oxford and Cambridge, or who took courses in high-earning professions such as medicine or dentistry, would substantial financial benefit from having a university degree.

Higher student fees and the cost of borrowing to meet these is the reason why degrees "no longer pay" for so many.

The report, by the Intergenerational Foundation, found that graduates would earn an average extra £100,000 throughout their careers over the earnings of a non-graduate peer.

But this benefit is wiped out by the cost of loan repayments, which can be as much as 9 per cent of graduates' wages.

It said that university was only of significant benefit to those graduating from certain degree courses at top universities, and that these graduates were more likely to be privately educated.

A student of a former polytechnic could expect to start on £7,600 less a year than an Oxbridge graduate, while a design student earns of average £12,000 less than a newly-qualified doctor.

It also said many graduates from certain degrees end up with employment they could have secured without going to university, such as working in a bar or cafe.

For example, 29 per cent of fine arts graduates end up working in retail or catering after graduation, compared to just 4.7 per cent of civil engineering graduates.

Someone who borrows the maximum amount for tuition fees and living costs will end up with £53,000 of debt after three years of study.

For some households this will now increase from £40,000 because the maintenance grant previously available to students from households earning less than £25,000 a year has been replaced with a loan, which must be repaid.